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| EUR/USD four-hour chart, source:FXDD.com |
cf. [EUR] Correction or Downward trend 2020 0305
cf. [EUR] Recovering Euro 2020 0302
cf. [EUR] Between the technical rebound and upward trend 2020 0226
cf. [EUR] Expecting Euro Recovery 2020 0223
Is Euro going to rise against dollar? Euro is under the correction, and it may retreat again. The weekly chart signals the correction and short-term downward trend. Four-hour chart shows reverse V pattern. But V pattern is less reliable than double-tops and head-and-shoulders patterns. And there is possibility of building double-tops pattern, too.
We need to be more careful to see the trend turn downward with the reverse V pattern. It is important to watch the weekly chart of EUR/USD in which the price exceeded 120 exponential moving average for the first time. In my experience the 120 EMA is not broken at once. It means euro could retreat, then the reverse V pattern in four-hour chart is supported.
If euro retreats, it could be supported at 1.12 first. The price, 1.1070 can be set for the second support line.
If euro succeed to rebound after the correction, euro is expected to rise to 1.20, where the main downward trend line is located.
US dollar rose 1.32 percent against euro on Tuesday. The market expected US fiscal stimulus and equities in New York stock market rebounded after Black Monday.
As well as new coronavirus, CoViD-19, the conflict between oil producers, Russia and Saudi Arabia threatened the financial market on Monday. OPEC and Russia failed to agree to decrease crude oil. Two oil producer increased oil produce suddenly, then the price plunged some 30 percent a day. It called Black Monday.
The market participants think, the pandemic outbreak makes more expenses from government and it is positive to the market.
Tempo's Juan Perez, a foreign exchange trader, said, the market wanted fiscal stimulus than rate cut or quantitative easing, Yonhap Infomax reported on Wednesday.
Yonhap Infomax also reported, Fed's possible quantitative easing would lower greenback and support euro quoting experts' mention.
But the expectations for the Donald Trump administration's stimulus package are showing signs of decline in a day. There are reports of President Trump's proposal to reduce the payroll tax rate to zero percent for the remainder of the year, but the question is whether it will be feasible.
In Wednesday morning(GMT), Asian stock market closed down and New York Futures Index was down.
Due to the uncertainty, the market fluctuates every day.
Therefore Gjallarhorn thinks, the long bias of euro is still valid in long term. But the deal is done when the price succeed to rebound.
Gjallarhorn has liquidated its Euro FX, long position. Though it recorded the profit, Gjallarhorn missed additional one big profit after potential big loss in multi-months. It was a beginner's trading style.
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